Demystifying FICA , the essential items , and its requirements for property transactions
Demystifying FICA , the essential items , and its requirements for property transactions
MARC ROPER Senior Compliance Officer - DOCFOX
What is FICA and why is it so important , and what are the essential FICA items for property transactions and also what systems are best ?
FICA is the Financial Intelligence Act that came into effect in July 2003 , along with the establishment of the Financial Intelligence Centre ( FIC ). The FIC is responsible for overseeing compliance with the Act . FICA aims to combat financial crimes such as money laundering , tax evasion , and terrorist financing . As an Accountable Institution , it is your responsibility to identify and verify your clients and ensure that their information is correct and up to date . FICA has been amended and is now known as the Financial Intelligence Centre Amendment Act 1 of 2017 ( FICAA ), which brings South Africa closer to international anti-money laundering standards .
Under the FIC Act property practitioners ( estate agents ) are specifically mentioned by name as being ‘ reportable institutions ’ with various obligations with regard to FICA with responsibility around identification of their clients as well as having their own risk management and compliance programmes . Estate agents must be able to verify and identify their clients . They also need to keep records of their clients while still being POPIA ( Protection of Personal Information Act ) compliant .
The estate agency business for example must appoint a Compliance Officer , and register themselves with the FIC ( Financial Intelligence Centre ). It must also create its own risk and compliance programme and train its employees and agents on it . Estate agents are also obliged to report all transactions which meet the reporting threshold and those which appear to be suspect in nature .
Why FICA is Important ? As a member of the Financial Action Task Force ( FATF ), South Africa has agreed to play a role in the international fight against money laundering and terrorist financing . FICA is South Africa ' s local legislation to achieve this . FICA complements other South African legislation such as the Prevention of Organised Crime Act ( POCA ), the Protection of Constitutional Democracy Against Terrorism Related Activities Act ( POCDATARA ), and the Prevention and Combating of Corrupt Activities Act ( PRECCA ). Together , these legislations introduce measures to combat and prosecute crimes such as organised gangs , racketeering , terrorist-related activities , and money laundering .
15 AUG / SEPT 2023 SA Real Estate Investor Magazine